Xerox renewal

Xerox invited me to its first-ever Partner Summit in Orlando and it became clear that, if you don’t have a local Xerox reseller knocking on your door today, chances are you will soon.

Small and midsize businesses (SMB) are once again the primary target of this huge, global vendor. While time will tell if Xerox will remain focused on this segment, it certainly has the religion today.

Anne Mulcahy, the chairman and CEO who took over in 2001 when Xerox was sliding toward oblivion, gave the keynote speech at the main dinner meeting. Her point? Xerox must “Partner or Perish” with resellers and SMBs.

I expected her speech to give small business the usual lip service and then advance to other topics, but she didn’t waver from her message. According to Mulcahy, the company sells to SMBs or they die. To help in its small business push, Xerox introduced seven new products ranging from a color laser for $499 to a multifunction solid ink printer at $1,499 (retail).

One reason Xerox has little traction with small businesses is the type of printer missing in that previous paragraph: ink jet. Xerox doesn’t make one, leaving the entry level color market to HP, Canon, Epson, Lexmark, and a few others. Yes, color ink jet refills cost more than you expect based on the low printer price, but you discover that detail after you buy one. Then it’s too late to put a calculator to the price per page and see that a color laser may actually be less expensive after a thousand or two pages. Great information, but too late. And many people, me included, print so few color documents that amortizing the price difference will take years, so ink jets remain popular.

Another reason Xerox has little traction with small businesses stems from the fact that relatively few resellers carry Xerox’s lower-end printers. Many people still consider color lasers expensive, which they used to be. However, street price for Xerox color lasers can be under $300, which is about four times cheaper than I remember color lasers from a few years ago. Xerox has to get that word out quickly.

Yet another Xerox hurdle in the small business market is, oddly, the company name. It has huge worldwide recognition, one of the highest of all brands, but people think “Xerox” means “copiers.” Without an army of resellers and retail presence in places like Best Buy, Frys, CompUSA, and Circuit City, small businesses won’t realize what Xerox now has to offer.

While all these hurdles look like an Army obstacle course, Xerox has some good cards to play. Most people hear Xerox and think high quality products, a great benefit. Too often they associate Xerox with high prices, which is not so great. Xerox and its resellers must explain that innovative technology reduced the high price but kept the high quality. It won’t be speedy or simple, but it’s easier than convincing buyers low quality has become high quality. It only needs to convince you to think of Xerox as affordable high quality, not crappy printers turned into gold. Manufacturers can lower prices much more easily than they can raise quality, so Xerox can beat the price perception problem.

Xerox can also play the environmental card with a straight face, unlike some of its competitors. It has a patented solid ink technology that replaces bulky laser cartridges with little waxy colored blocks that look like candy. Small colored blocks in small boxes generate a tiny amount of trash compared to laser cartridges and their boxes. Plus, when the solid ink is gone, it doesn’t leave a large plastic cartridge behind.

But more important is the quality of solid ink printouts. My first word when seeing one was “wow.” Some resellers told me they sell solid ink printers to photographers who use them in place of traditional photograph equipment for prints. I can believe it. Although we don’t have 20 years of aging experience on these new solid ink printers, they don’t smudge or run when wet like ink jet output. Time will tell, but they look as permanent as photographs to me.

Speaking of resellers, all I spoke to were fairly happy. A few complained about wanting more margins, but the only resellers who don’t complain about margins are dead or in a coma. Xerox now allows resellers access to higher end products formerly reserved for Xerox-only resellers called agents or Xerox direct sales, which will make the resellers happier. Xerox also has pricing options based on pages printed, reducing the guesswork on the monthly bills for service and supplies.

Xerox executives feel the U.S. SMB printer market in North America is worth $17 billion. I think that’s optimistic, but there is money to be made. And Xerox’s new focus, products, and lower pricing should help the company get a fair share. But I’m sure it would appreciate it if you looked a bit upstream before you bought your next ink jet. The cool factor of solid ink should be worth taking a look at some sample printouts. Once you do, ink jet output will look like a child’s drawing compared to a solid ink Renoir.